Rising expectations that China and the United States will soon reach an interim trade deal provided fresh impetus to Asian markets on Wednesday, with Donald Trump saying the talks were “in the final throes”.
However, observers said that while the broad consensus is that the two will tie up something soon, there is an underlying unease at the lack of detail that is brewing uncertainty.
“We’re getting to the point where they need to show us the money,” said Michael Reynolds, investment strategy officer at Glenmede Trust Co. “Talk is one thing but an actual deal on paper, pen to paper, is what is going to dramatically change the market narrative.”
Regional investors were given another record-breaking lead from Wall Street, with comments from Beijing and Washington adding to the confident mood in trading floors.
Trump said on Tuesday: “We’re in the final throes of a very important deal, I guess you could say one of the most important deals in trade ever.”
He also raised the issue of unrest in Hong Kong, which has become a touchpoint after Congress passed a bill supporting the city’s rights and sent it to Trump to sign into law. Progress of the bill has angered Beijing, however, and fuelled concerns it could upend the trade talks
Trump did not indicate whether he would put his name to the bill, instead emphasising his close ties to Xi Jinping and efforts to seal the trade agreement.
“It’s going very well but at the same time we want to see it go well in Hong Kong,” he said. “I think it will. I think that President Xi can make that happen. I know him and I know he’d like to make it happen.”

‘Time to break bread’

In early trade, Hong Kong rose 0.2 percent, with e-commerce titan Alibaba piling on more than two percent a day after its city debut that saw it rally more than six percent.
Shanghai edged up 0.1 percent and Tokyo ended the morning 0.4 percent higher. Sydney and Wellington jumped 0.7 percent with Singapore putting on 0.4 percent. Seoul and Taipei each gained 0.3 percent, and Manila surged 0.8 percent. Shanghai was flat.
Still, while buying sentiment remains intact, investors remain concerned that the talks could collapse at the last hurdle, as they have in the past.
“Now it’s time for both leaders to schedule a venue and put pen to paper on the phase one deal officially,” said AxiTrader’s Stephen Innes. “If there was ever a time to break bread, now is the time as investors are not piling into equities for health reasons, they’re expecting a substantial payout when the deal is finally signed sealed and delivered.
“And they certainly won’t be in the mood to be walked down that trade talk garden path only to run into another dead end.”
The trade outlook provided support to higher-yielding, riskier currencies as the South Korean won, the Chinese yuan and the Australian dollar made gains on the greenback. And the US unit advanced on the Japanese yen, which is usually considered a go-to asset in times of turmoil and uncertainty.
The pound extended losses after opinion polls showed the main opposition Labour party closing the gap on Prime Minister Boris Johnson’s Conservatives just over two weeks before the general election.
Sterling has been given a lift in recent weeks by expectations Johnson would win a workable parliamentary majority that would allow him to push through his Brexit plan but the latest data indicate it might not be as plain sailing as previously thought.
– AFP